Common Mistakes of DIY Investors, New Car Savings, Your Life Will Change When plus Community Wins
Common Mistakes of DIY Investors
Cody Garrett and I plan to do a podcast episode around his list of the ’24 most common mistakes of DIY investors,’ but the list was so good that I couldn’t hold back from highlighting a few that particularly stuck out to me:
They own too many accounts, including old (expensive) workplace retirement accounts, HSAs, and checking/savings/brokerage accounts without clear purposes.
They don't take advantage of employee benefits, including HSA and FSA contributions, the group legal plan, and group insurance options.
They give cash to charity rather than appreciated securities, whether they can itemize deductions or not.
They forget to automatically reinvest their dividends, resulting in cash building up on the sidelines - often within the low-interest cash sweep position.
They forget about Social Security when calculating their early retirement distribution needs. [Brad Note: Cody and I will discuss the nuances of how you include this in your FI Number, but the main point is to not count social security as $0]
They assume health insurance coverage is expensive in early retirement based on their assets - when it may be cheap or even fully subsidized based on their income.
Service I Used to Save on a New Car Purchase
My older daughter gets her full driver’s license in about 3 weeks and I’ve had a bit of an odyssey navigating the car purchasing process (talk about a paradox of choice!).
I’ll tell the full story on a future roundup episode with Ginger, but the heart of the matter for the newsletter was this:
I zeroed in on the exact car we wanted and was set to go into our local dealership to buy it. The manufacturer and dealership were advertising $3k off the MSRP to get rid of their 2024 models, so it seemed like a great deal.
Just for fun, I went online to see if any service existed where you can put in the exact car you want and solicit bids from dealerships within a certain radius.
I came across the ‘U.S. News Best Price Program powered by TrueCar’ and it was a dream come true:
I entered the make, model, trim, etc. and put in a radius and all the Volkswagen dealerships in our state gave me their best offer.
I got an additional $2,000 off the price I was already set to walk into our local dealership and pay for the exact car!
And I was able to do everything via the phone and scanning documents to the dealership, so I didn’t have to spend half a day buying the car.
They even drove it to me from 70 miles away, I signed some papers and handed them a check and bought the car.
Best car-buying process ever at a better price than I could have imagined!
Your Entire Life Will Change the Moment You...
I came across a wonderful thread by Sahil Bloom on Twitter that I want to paste here for your benefit, as this is profound wisdom:
Your entire life will change the moment you...
Stop gathering more information and start acting on the information you already have.
Stop complaining about things you can’t control and start taking ownership over the things you can.
Stop focusing on being impressive to others and start focusing on being impressive to yourself.
Stop fearing the regret of action and start fearing the regret of inaction.
Stop saying yes to everyone else and start saying yes to yourself.
Stop worrying about what others are doing and start focusing on what you’re doing.
Stop waiting for the things you want in life and start acting to make them a reality.
Stop hoping for luck to strike and start moving to create your own.
Stop tolerating people who tear you down and start spending time with people who lift you up.
Stop chasing things that can be bought and start prioritizing things that must be earned.
Stop treating your body like sh** and start treating it like a house you have to live in for the next 50 years.
Stop allowing constant stimulation and start embracing boredom.
Stop comparing yourself to others and start comparing yourself to you from yesterday.
Stop waiting for the perfect moment and start making the ordinary moment perfect.
Stop blaming others for your situation and start taking action to change it.
Stop seeking the safety of comfort and start forging yourself in the fire of discomfort.
Stop relying on motivation and start leveraging discipline.
Stop expecting immediate results and start embracing delayed gratification.
Stop holding yourself to someone else’s standards and start creating your own.
Stop focusing on what you don’t have and start expressing gratitude for what you do have.
Stop taking everyone else’s advice and start taking your own.
Stop worrying about the opinions of haters and start stacking evidence to prove them wrong.
Stop treating rest as a reward and start treating it as a critical part of your high performance routine.
Stop waiting for people to give you the things you deserve and start asking for them.
Stop being broken by chaos and start becoming adaptable to benefit from it.
ChooseFI Community Taking Action This Week
My family's 1% better (or likely much more than 1% better) is my husband secured employment with a state educational institution where we anticipate that his employment will open doors for us to access less expensive insurance saving hundreds if not thousands as well as contributing much of his income to both a 403b and 457 plan!
- Kendra
My 1% better was going to my local goodwill and buying an alarm clock so I could keep my phone out of my bedroom at night. I now charge it in the kitchen and no longer mindlessly scroll for 30 minutes before bed and another 30 as soon as I wake up. Sometimes I've even forgotten to check it in the morning for a few hours. My sleep has improved and I just feel more present with my family.
- Ron
My 1% better is getting a side hustle! It's something I've wanted to do for a while but I didn't really know what to pursue. A community garden manager is something I never thought I'd be able to do, given that I had ZERO gardening experience, but I had initiative and a vision!
So I'm making an extra couple hundred a month (that's going straight to VTI) and learning a new skill that I envision myself doing in CoastFI/semi retirement/retirement. Not to mention I feel closer to my small community and I meet new people every day.
It feels good to grow food, promote food security and sustainability, and create a welcoming, beautiful safe space for people to enjoy--all while earning a little extra cash on the side. Overall, a great experience though not without a little drama and chaos sprinkled in!
- Alicia
My 1% better this week is coming across one of your interviews on the Flipped Lifestyle podcast. I've been working on building an online business and found Shane Sams. Loved the podcast and started going through the back catalog.
Thanks for being open about your business, wins, and struggles in the interview. It sounded like there may have been another older one I haven't gotten to yet from before ChooseFI, so looking forward to finding it.
- Bryan
My 1% better was to find the least cost index fund availability in my 401k, Vanguard Total stock market admiral shares and move all money into that one fund. I had been using their service called Portfolio Express which allocated my money across about 10 different funds choices, some with expense ratios as high as 1.62%!
I'm also selling individual stocks that have seen a gain in my Roth IRA and buying VTSAX.
Also I calculated how much I need per paycheck to max out my 401k and am contributing that along with front loading mine and my husband's Roth IRA accounts with the max contribution of $8,000. I'm 51 and he's 63. We are late to FI but I believe we can catch up with aggressive contributions over the next 10 - 15 years.
- Monica
I am a small business owner and work 100% virtually from my home office, but I just signed a lease to rent a private office space one mile away. Having a separate workspace will allow me to create healthier boundaries between work and home, especially as our family prepares for possible infant adoption later this year.
It seemed silly to pay $550/mo. for additional space I didn't "need," but the return on investment will go beyond the numbers; it will improve my deep work focus, quality time with my family, and my physical health as I walk or bike between home and work.
- Cody